Thursday 17 November 2016: New research into the Gender Pay Gap in Ireland carried out by Irish owned professional recruitment company Morgan McKinley, in collaboration with salary benchmarking specialist Emolument.com, has found that the average earnings gap in Ireland in 2016 stands at 20%. On average, men working in professional jobs earn €12,500 more than women when bonus and salary are taken into account. When the two are split, the average salary gap stands at 16% while the bonus gap goes up as high as 50%.
“These are concerning findings and point to a problem which could have serious ramifications for the future”, said Karen O’Flaherty, Chief Operations Officer of Morgan McKinley. “Greater wage transparency is going to be key going forward, companies need to start effectively addressing the issue, before they are obliged to.”
Morgan McKinley partnered with global salary benchmarking experts Emolument.com to collate the salary data from more than 5,500 professionals working in Ireland, through an online survey.
Potential contributory factors
The research analysed factors such as educational attainment, experience, and sector to examine whether these had any role in pay differential.
Quite surprisingly, the research indicates earnings gap actually increases along with the education level attained. While the gap is 10% for employees holding a BSc Degree it actually rises to 33% for Executive MBA holders. That represents a gender pay gap of €32,500 difference annually, compared to €11,500 (22%) difference between men and women with no degree. Greater educational attainment on the part of women therefore has no impact on the earnings pay gap.
The concerning trend is in evidence when it comes to experience. The gender pay gap actually widens with years of experience from 12% for 0-5 years’ experience through to 28% for 15+ years’ experience.
On the other hand, there is an encouraging narrowing of the gender pay gap for women who manage to make it to the top. They are paid almost the same as men at chief executive and other top executive levels (1% pay gap) but that’s largely compensated by the fact that there are far less women in those positions than men – 24% to 76%. Indeed, female representation diminishes fairly consistently from entry level through to top level executive.
The one stand-out exception to this rule is HR where there has traditionally been a disproportionately higher number of female HR Leaders than males. The balance stands at 73% female to 27% male at the moment and this has led to a 15% higher salary differential in favour of female HR leaders.
Some of the sectors and jobs in which the pay gap is the highest are ones in which bonuses traditionally represent an important component of compensation. Financial Services has the highest pay gap of all sectors at 29% while sales jobs have the highest pay gap of all disciplines with males earning 23% greater than their female counterparts. Sales and financial services represent the employers with the highest bonuses and therefore the highest gender pay gap.
The technology and professional services sectors deserve plaudits in this regard. The lowest pay gaps were found in Big Data (3%), Accounting (5%), and Audit (8%). This reflects efforts by professional services firms to ensure a greater gender balance among graduate intake. There is also evidence of a positive bias towards females in technology by employers in what has historically been a male dominated sector and this has been reflected in the lower salary differential of 7% in the Technology and Telecoms sector.
“Overall the findings are in line with the latest report of the World Economic Forum which showed that the global gender pay gap has widened in the past four years to 59%, in spite of the improvements made in areas such as education”, said Karen O’Flaherty of Morgan McKinley.
The European pay gap also continues to widen. The first European Equal Pay Day was held on 5th March 2011, and is held every year on the date that marks the number of extra days a woman must work to match the amount of money earned by men in the previous year. This year it was held on 8th March indicating the number of extra days to have grown to 67 from 64 five years ago.
“The most surprising aspect of the findings of our research is that it would appear that the higher their educational attainment and the more experience they have women find themselves being paid even less than their male counterparts”, Ms O’Flaherty added. “This is a very serious issue for the woman affected and for society as a whole. It can only harm our prospects for future economic growth if it is not addressed urgently.”
Addressing the problem
Measures to deal with the problem include improving gender diversity in the workplace by positive actions in recruitment process; increasing the number of females working in STEM related disciplines; introducing more family friendly policies to workplaces; greater focus on mentoring female professionals; and greater wage transparency.
“We have seen first-hand where employers who implement change in their recruitment processes have positively influenced the number of females progressing into male dominated disciplines and vice versa”, she added. “Encouraging more girls to study STEM subjects will assist them take up careers in areas like tech and engineering where the pay gap is lowest. The availability of flexible working arrangements needs to become the norm in all organisations across every sector to ensure that females do not have to sacrifice their experience, progress and ultimately pay within an organisation that does not flex to suit their schedule and to enable men to take a shared approach to parenting and balance their role as earners.”
Ms O’Flaherty also highlighted the need for more female role models citing a report from Grant Thornton which put the proportion of female leaders at 24% and just 8% on Boards of publicly listed companies. “The lack of female leaders has a knock on effect in inspiring the future female leaders”, she said. “Mentoring groups for females have grown in momentum in recent years with the express intent of improving confidence in females to tackle issues such as career advancement, balancing career and parenthood, striving for better pay and ultimately the conviction to lead more. A more confident and supported female workforce would have the positive effect of promoting a greater proportion of female representation at the leadership table as well as contributing to a reduction in the gender pay gap.”
In the UK, gender pay gap reporting legislation will require large employers (250+) to publish their overall mean and median gender pay gaps from 2018. Under the new laws, employers will have to calculate their gender pay gap from April 2017 and publish the details by April 2018.
Ms O’Flaherty called on the Irish government to make good on its commitment in the Programme for Government to put the reduction of the gender pay gap formally on the political agenda. “While we await details of how this commitment will be implemented, early indications point to the introduction of wage surveys for companies of 50 or more employees. This will be the starting point in promoting wage transparency in Ireland. Greater transparency can only help promote greater pay fairness and equality and will ultimately play a key role in closing the gender pay gap.”
About the report
The report is based on an on-line survey which analyses the current gender pay gap (basic salary plus bonuses) amongst professionals in Ireland including aspects such as: sector, discipline, location, years’ of experience, level in a company, proportion between men and women and education level.
As a leading professional recruitment provider in Ireland with an international reach across ten countries, Morgan McKinley has partnered with salary benchmarking experts Emolument.com to collate this salary data from more than 5,500 professionals working in Ireland, through an online survey.